What to Know About Being a Financial Advisor

You have a knack for finance and want to guide people through their money problems. Excellent, as you already have what it takes to be a financial advisor. These advisors are those who offer strategies and tips to help better everyone’s financial advisors. However, the career isn’t exactly as easy as telling someone how to budget. In this post, we’ll be covering what there is to know about being a financial advisor.

What is a Financial Advisor?

Before we get into skills to learn to get a good job and what you need to know about the position, it’s important that you understand what a financial advisor actually is. In truth, it’s a rather generic term used in the industry. They’re professionals, but there’s no set niche for a financial advisor. This kind of advisor can be a stockbroker, tax agent, investment manager, or even an insurance agent. You can choose to either provide general information or choose a specific niche to specialise in.

Be Prepared for Any Situation

While your topic may not change, the clients and their situation will differ. A reputable financial advisor can handle any situation. Let’s say you have a client that wants to save more money on their taxes. However, they’re not exactly sure how to go about it or what they can deduct. As their financial advisor, you can counsel them on how taxes work and offer suggestions.

One strategy you can suggest is to encourage them to co-sign on a student loan. Co-signing is when someone agrees to fulfil the responsibility of paying the monthly instalments in the event the primary borrower is unable to. But it’s not exactly a one-sided benefit; co-signers are able to deduct almost $3000 on their taxes. A common question you may hear is “how does co-signing a student loan affect my credit?” Make sure to tell them the risks involved with co-signing. If the primary borrower misses too many payments, both credits take a hit.

Be Willing to Socialise

As an advisor, you’re going to be meeting different personalities. You’ll be talking to many people, so being able to effectively network and socialise is an absolute must. If you’re someone who’s not very sociable and prefers to work alone, then this job isn’t for you.

Have an Amazing Income Potential

What a lot of new advisors aren’t aware of is the amazing income potential. Financial advisors can earn money depending on how many clients they’re willing to take on and the amount of hours you choose to work. There are two different pay structures financial advisors use: fee-based or commission-based. There are those who even use both structures to maximise their earnings.

It’s a Very Demanding Job

Depending on how you go about it, advising people on their finances can be a stressful job. In fact, you’ll go from offering advice to soothing a client’s anxiety. This isn’t exactly a bad thing as the economy is constantly changing and people are becoming more uncertain about their own financial stability. If this is your full-time position, be sure to create a comprehensive schedule and have work-life balance.

From Robo-Advisors to Traditional Planners: Which Financial Advisor Is Right for You?

Managing your finances can be daunting, especially if you need to familiarise yourself with the financial world. That’s why having a financial advisor, such as with Chocolate Finance, can be incredibly beneficial. However, with so many options available, figuring out where to start can take time.

Each option has its advantages and disadvantages, and it ultimately comes down to your unique situation and needs. By the end of this article, you’ll better understand the different types of advisors available and be able to make an informed decision on which type of advisor best suits your needs.

Robo-Advisors: What They Are and How They Work

Robo-advisors are a relatively new type of financial advisor that has become increasingly popular in recent years. They are automated platforms that use algorithms to provide investment advice and manage portfolios. They are typically more affordable than traditional financial advisors, making them an attractive option for those just starting their investment journey.

Robo-advisors use algorithms to create and manage investment portfolios based on your specific goals and risk tolerance. These algorithms consider factors such as age, income, and investment goals to create a personalised investment plan. Once the plan is created, the robo-advisor will automatically invest your money into a diversified portfolio of exchange-traded funds (ETFs) that align with your investment goals.

One of the main advantages of robo-advisors is their low cost. Robo-advisors typically charge a lower fee than traditional financial advisors, making them an attractive option for those looking to save on fees. Additionally, because robo-advisors are automated, they are available 24/7, making it easy to access your account and track your investments from anywhere at any time.

Another advantage of robo-advisors is that they are easy to use and require little to no investment knowledge. If you’re new to investing, a robo-advisor can be a great way to get started without having to worry about managing your portfolio yourself.

Despite their many advantages, robo-advisors may not be the best option for everyone. Because they are automated, they may not be able to provide the personalised advice that a traditional financial advisor can offer. Additionally, if you have a complicated financial situation, a robo-advisor may be unable to provide the support you need.

Traditional Financial Planners: What They Do and What to Expect

Traditional financial planners are human advisors who work with clients to develop financial plans tailored to their unique needs and goals. They typically work for a financial services firm, although some work independently, and often hold certifications such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

One of the main benefits of working with a traditional financial planner is the level of personalisation and customisation they can provide. They will take the time to get to know you, your financial situation, and your goals and aspirations. They will also work with you to create a comprehensive financial plan that addresses various areas, such as retirement planning, investment management, estate planning, and tax planning.

In addition to offering personalised advice and guidance, traditional financial planners can also provide a wide range of services that may not be available with robo-advisors or online financial planning services. For example, they can help you navigate complex financial situations, such as divorce or inheritance, and provide ongoing support and guidance as your financial situation evolves.

When working with a traditional financial planner, it’s important to keep in mind that their services come with a higher price tag than robo-advisors or online financial planning services. Fees can vary, but you can expect to pay a percentage of assets under management, a flat fee, or an hourly rate. It’s also important to carefully vet any potential financial planner to ensure they have the necessary certifications and experience to provide the level of service you need.

Considerations When Choosing a Financial Advisor

Your Goals and Needs

Before choosing a financial advisor, take the time to clarify your financial goals and needs. This will help you identify the type of advisor that can best meet your needs, whether it’s a robo-advisor for basic investment management, an online financial planning service for more comprehensive planning, or a traditional financial planner for personalised advice and guidance.

Credentials and Experience

Verifying any certifications or licenses held by potential financial advisors and considering their experience level is essential. Look for advisors with relevant certifications, such as CFP, CFA, or CPA, who have experience working with clients in similar financial situations.

Fees and Pricing

Consider different advisors’ fees and pricing structures and compare them to your budget and financial goals. Remember that lower fees may not always be best if they come with lower-quality advice or support.

Communication and Availability

Ensure you understand how often you can communicate with your advisor and how responsive they will be to your questions and concerns. This is particularly important if you have a complex financial situation or anticipate needing ongoing support and guidance.

Fiduciary Duty

Some financial advisors are legally required to act in their clients’ best interests, while others are only held to a lower standard of “suitability.” It’s important to understand your advisor’s fiduciary duty and to choose one who will prioritise your needs and goals above their own interests.

Making the Decision

Evaluate the Pros and Cons

Take a few moments to evaluate the pros and cons of each option. Consider your budget, investment goals, and personal preferences. Make a list of the pros and cons for each type of advisor, and compare them.

Conduct Interviews

Interview potential financial advisors to learn more about their approach, experience, and qualifications. During the interview, ask about their investment philosophy, the types of clients they work with, and how they are compensated.

Check References

Once you’ve narrowed your list of potential advisors, check their references. Ask for references from current and past clients, and reach out to them to learn more about their experience working with the advisor.

Trust Your Gut

Finally, trust your gut when making the final decision. Choose the advisor you feel most comfortable working with and believe will help you achieve your financial goals.


Choosing a financial advisor is a crucial decision that can impact your financial future. Whether you work with a robo-advisor or a traditional financial planner, it’s important to understand each option’s pros and cons and consider your needs and preferences.

By following the steps outlined in this article, you can choose a financial advisor that will help you achieve your financial goals and set you on the path to financial success.